2010-2011 A year that confirmed the effectiveness of our value strategy and committed to the long-term
Dominique Hériard Dubreuil, Chairman of the Board.
Jean-Marie Laborde, Chief Executive Officer.
In an economic climate which remains uncertain, our activities have delivered a strong performance with growth in turnover of 12.4% (6.4% organic) and a notable improvement in operating profit, which increased by 17.6% (8% organic), while marketing investment was increased to support the brands.
A further highlight last November was the announcement of our intention to dispose of the Champagne division. On 31 May, we reached an agreement to transfer this division to the EPI Group. Rémy Cointreau will retain all the distribution rights for Piper-Heidsieck and Charles Heidsieck, as well as for Piper Sonoma (the US sparkling wine brand).
Finally, in the first half of the year, we restructured the Group’s debt under favourable conditions, thereby increasing its maturity to 2016.
Proudly asserting the excellence of our brands
The position of our international brands was consolidated thanks to a strategy of moving upmarket and the strong marketing dynamics of our sales teams in their major markets. In Asia, America and Europe, our customers and the changes in consumption patterns are our priorities. The essential ingredients of our commercial success are to respond, accompany, anticipate and fulfil consumer demand, focusing on quality rather than quantity. The need to move the brands upmarket, together with developing creative innovations and using a wider variety of communication media, enabled us to continue to successfully implement our policy of price increases.
Asia, top-selling region
Once again this year, Asia delivered a great performance, becoming our top-selling region. The Rémy Martin Fines Champagnes and Grande Champagne Cognacs were the principal growth drivers. This was affirmed by the success of 1898 in China and the positive commercial dynamics of Vietnam and Singapore. Equally spirits, particularly Cointreau, view these countries as a favourable environment for growth. In this respect, the creation of a new distribution subsidiary in Japan is an important strategic step in the Group’s development within this region of the world.
In America, mainly in the US, there was growth in the second half of the year. Due to their premium products, with strong consumer appeal and suited to cocktails and new consumption patterns, Rémy Martin and Cointreau delivered a number of promotional drives in the US. This was also the case for Mount Gay Rum with the success of Silver in the Caribbean, and for St-Rémy, which experienced a genuine revival in Mexico.
Europe has also seen growth despite the current situation in Greece, which weighed heavily on Metaxa. Eastern European countries confirmed their potential, with a renewed strength in the Russian market. In the West, as the on-trade recovery of Cointreau and champagne demonstrated, so-called “mature” countries have shown that they are open to new creative challenges.
Several innovations have marked the year with, unusually for Rémy Martin, the creation of a limited edition VSOP graffiti in China, the launch of Centaure de Diamant in Travel Retail, as well as genuine advances such as Rémy Martin V. The coming year will be equally as dynamic, particularly in the support and development of our brands in new regions of growth, namely Asia, Australia and Brazil.
A long-term commitment
We recognise that the perfection we seek in our brands takes time to achieve. That commitment to long-term development is at the heart of what we do. This goal is shared with all our stakeholders and is the bedrock of our social and environmental responsibilities. Primarily, it concerns employees and shareholders but also our suppliers, our distributors and our partners, who respect our commitments. Year after year, all of them demonstrate their confidence in our strategy.
Rémy Cointreau will firmly maintain its focus on its strategy and long-term commitments. The transfer of the Champagne division is entirely consistent with the acceleration of this strategy. In particular, it will allow us to finance growth in both traditional markets and the Group’s future markets, while continuing to keep a close eye on any growth opportunities that may present themselves.
A strategy focusing on high value-added products, sustained by a policy of strong product innovation and supported by a high performance network, will provide the Group with the necessary resources to ensure steady, profitable growth.